Staff: Well, thanks for joining us this morning. Mr. Ray DuBois, who is the deputy undersecretary of defense for installations and environment, as well as has some other hats, too -- he has a very big portfolio -- but he's here today to talk about installations and environment, and particularly about his efforts to streamline headquarters.

So, sir, let's go ahead and get started.

DuBois: As Bryan [Whitman, deputy assistant secretary of defense for public affairs (media operations)] said, on the 1st of October, the secretary -- actually, it was late in the summer -- he said, "Would you come and talk to me about taking Doc Cooke's job?" And I talked to the deputy secretary and others, and I said, "Do you think the secretary of Defense means to add Doc Cooke's job to what I'm doing, or take Doc's job, in a separate sense?" They said, "No, no, no; all together." I said, "I see. And how many hours in the day can we manufacture to do all of this?"

In any event, I did do that. I am shouldering both the Washington Headquarters Services and the Installations and Environment portfolios, which have interesting overlaps. And as we're finding, there are ways to perhaps do things a little bit better in terms -- especially in terms of real estate management here in the national capital region.

But I think that most of you might want to focus on some of the things that we deal with in the Installations and Environment portfolio, arguably high political profiles in each of the areas, but important to the secretary and to the president, such as housing and quality of life, housing privatization programs, and I can address some of those. But we also have issues pertaining to BRAC, and I want to talk a little bit about that this morning, and the environmental encroachment initiative, which the department -- the administration proposed to Congress last year. And that has implications for our environmental management systems, guidelines that I've put out. There are a couple of interesting aspects of that that I can address.

But on the environmental front, I also want to let folks know that we do a great deal overseas. Our combatant commanders come in to me frequently and request environmental security support, if you will, for countries within their AOR. I have given and participated in a major conference under General Tommy Franks, sponsorship for countries in Central Asia. I've also given and participated in a conference in terms of the countries which have newly joined NATO, under General Ralston's sponsorship. I've also sent Curtis Bowling, the assistant deputy undersecretary of Defense, to South America, under General Tom Hill's sponsorship in SOUTHCOM.

In any event, some of the highlights, I think, as you know, of the past year certainly have to be the progress that we've made, the dramatic progress that we've made, in housing. The president made it very clear in the spring of '01.

In fact, the very first trip that he took on Air Force One was to Fort Stewart, Georgia. I advanced that trip with the director for president advance, Brian Montgomery, and I knew -- we knew, obviously, where the president was going to go when he and the secretary went to Fort Stewart. What we didn't know was how the president would react to the housing and barracks situations that he was exposed to. Not surprisingly, he turned to the secretary and said, "We've got to do something about this, and we've got to do something about this as quickly as possible."

Now it is true that the Clinton administration had put into place a housing privatization program, which, working with the Congress, getting the congressional authorization to do this, had taken hold. All major changes in policy and programs in this department do not -- are not necessarily quickly embraced by the services -- true in this regard also.

But by the time that we came here in January of 2001, there were already contracted for privatization little less than 6,000 housing units of the somewhat less than 270,000 that the Department of Defense has. Since January 2001, we have -- and by the end of this fiscal year, we will have contracted with the private sector for the upgrade and improvement of 68,000 housing units in the Department of Defense. That's a tenfold increase. These numbers, by themselves, are dramatic. The president and the secretary have laid down a marker: fix inadequate housing by 2007. We have approximately or we were faced with approximately 180,000 inadequate housing units in our inventory. But to have addressed by the end of this fiscal year some 68,000 -- not all of which, however, were inadequate -- I think, is an achievement worth recognizing.

BRAC '05. As you know, the president went to the Congress with an initiative and asked them for authorization for a BRAC round -- the first time since 1995. The Congress, the secretary secured congressional authority to execute a BRAC round in 2005. I think the Congress agreed to do it, at the secretary's urging, because it recognized the importance to transforming and restructuring the real property assets of the Department of Defense.

Yesterday, the secretary of Defense, Secretary Rumsfeld, convened the first meeting of the combined Infrastructure Executive Council and the Infrastructure Steering Group, which as a practical matter, means the 30 top leaders, military and civilian in this department and three military departments. Around that table, with some moderate exceptions because of travel outside of the city, but the deputy secretary was there, the vice chairman of the joint chiefs were there, service secretary, service chiefs, vice chiefs, assistant secretaries and the unders here in OSD.

There was a unanimous agreement in the dialogue with the secretary of Defense that this was a -- this is a singular opportunity, perhaps the last best chance in a generation, to reshape our infrastructure to optimize military readiness, not just in the United States; remember that BRAC -- the BRAC authority, is domestically focused. The secretary, as some of you know, has been working with the chairman of the combat and commanders to address the overseas basing structure which we have, which is a Cold War legacy and must be reconfigured to fight the global war on terrorism.

Now, because of its importance, the service secretaries and Pete Aldridge, the undersecretary for Acquisition, Technology and Logistics, made a recommendation to the secretary of Defense that BRAC deserved its own corporate decision structure. And so the Infrastructure Executive Council, made up of the deputy secretary and the chair, the chairman of joint chiefs, the service secretaries, and the service chiefs and Pete Aldridge constitute the board of directors, if you will, through which all recommendations will flow to the secretary of Defense by the spring of '05.

Those of you who are familiar with how this building operates realize that that Infrastructure Executive Council is essentially the senior leadership review group of the department. But it does extend to the vice-chiefs and the assistant service secretaries for installations and environment, who will bear the burden -- the analytic and preliminary decision burdens through the next two years.

Let's move on to the Range Readiness and Preservation Initiative, an initiative which was hammered out between the Department of Defense, the Department of Interior, the Department of Commerce, NOAA, the Environmental Protection Agency and the Council on Environmental Quality under the guidance of OMB last year; and as you know, this initiative on the part of the administration to ask Congress to address some of the aspects of environmental statutes which we believed required clarifications, to allow us some flexibility on our test and training ranges and our installations to better maintain military readiness.

You've heard me and others say that the environmental encroachment poses challenges to us in terms of our ability to fight as we train -- or, excuse me, train as we fight. The problem is that we end up fighting as we train. When you send young soldiers, sailors, airmen, Marines out to Afghanistan, they end up fighting as they have trained. When training is impacted negatively by environmental encroachment -- environmental encroachment is not just the Endangered Species Act and critical habitat management issues that we face every day; it's also urban sprawl, and it's also airspace management, it's also spectrum competition. All of these issues I put under the umbrella of encroachment.

Now, those of you who have carefully watched what happened last year know that the Congress, in the FY '03 Defense Authorization Act, included or adopted two so-called affirmative land provisions and adopted only one of the six environmental amendments which we had requested. That was the Migratory Bird Treaty Act temporary exemption, which they granted, for the incidental taking of migratory birds during military readiness activities.

I am grateful to Congress to have -- we are grateful to have addressed these serious readiness concerns, which -- I was reminded the other day of all the hearings that we had, of all the discussions that we had with the National Governors' Association, with NGOs, with environmental groups, with military groups, perhaps the most dramatic moment, in my mind, was when the four vice chiefs appeared before the Environment and Public Works Committee of the Senate -- Senator Jeffords in the chair, Senator Smith ranking, Senator Inhofe and Senator Warner also there -- to demonstrate -- and, I think, in a very compelling way -- the challenges that we face in terms of environmental encroachment.

Now you're right to ask: What's in store for the next legislative cycle? As you know, the secretary and the director of OMB and ultimately the president are in the final throes of crafting the FY '04 budget and program. It is our view, my view, that what we presented last year is no less important and no less compelling than this year. If anything, it is more important than ever that we again engage the Congress in this dialogue over these issues.

What exactly will be in the administration's request I can't talk to, other than to let you from my personal standpoint the six provisions that we suggested or urged that Congress adopt remain, in our view, very important.

Part of that was the request to amend the Endangered Species Act to allow for a congressionally mandated requirement -- the Sikes Act -- allow the Defense Department to use the mandated requirement under the Sikes Act to provide critical habitat management under the integrated natural resource management plans.

Now, so-called INRMPs, as many of you know who study this, are a very sophisticated way to holistically manage a property on test and training ranges as well as installations. We think that it in every way addresses critical habitat issues and focuses on the preservation of real property and the maintenance of healthy and functional ecosystems. Granted, there are disagreements between us and some environmental groups, albeit not all, in this regard, but we will raise the issue again.

A number of articles have appeared over the past year addressing the so-called crumbling infrastructure which the Department of Defense has. The sustainment of our facilities, the restoration and recapitalization of our facilities, including the building you're in now, which is arguably the most well-recognized U.S. military installation in the world, takes a considerable amount of money. But how to determine what's the right amount of money has always been a difficult analysis and calculation to make.

The facilities sustainment model and the facilities recapitalization metric, which we have worked on for several years both under Secretary Cohen and now under Secretary Rumsfeld, has -- and I checked with a number of experts in the private sector to see whether our models, our management and financial models, pass muster with them in terms of how they manage -- how does ExxonMobil; how does General Motors; how does Procter & Gamble manage their enormous real estate and real property assets? And they say that our models are as good as theirs. In fact, we modeled our model after many of theirs.

Last year, you may remember that I was criticized, that the department was criticized, that they hadn't put enough money into military construction, enough money in facilities sustainment. There are competing and conflicting requirements within this department; there is a top line under which everything has to be appropriately funded. I think that we have focused on mission-critical requirements when it comes to military construction. There is no mission-critical requirement that hasn't been appropriately funded in either '03 or in the budget that we're building for '04.

There is a connection -- and make no mistake about it -- the excess capacity that this department has, hence the request for BRAC and the Congress's authorization to do it. That does not mean we will not continue to sustain, which means maintain, the facilities that we have now, even though there will be a BRAC, a set of decisions in the spring and summer of 2005, unknown to what extent it will impact installations and excess capacity. But if yesterday's discussion with the secretary of Defense and the senior leadership of this department is any indication, there is not only a recognition that we must be comprehensive and even-handed in our approach to this very difficult task, but that there will be a product which will reconfigure and, yes, downsize our real property assets around the world.

There are some of the highlights that I have chosen over the past year, and yes, they have serious implications for the next year. I am pleased to be here, and will try to answer your questions on these or other topics.

Yes, ma'am?

Q: The council, the Infrastructure Executive Council, you said they're going to review recommendations. Who's making the recommendations?

DuBois: As opposed to prior BRACs -- we've had four of them -- they were essentially service-centric. That is to say the services, independent of each other, wrestled with their own BRAC analysis, and at the end, presented them to the secretary of Defense. This secretary of Defense has said no, we're going to turn that around. While there are certain operational and military or service-centric, service-specific aspects of your real estate that we will -- that the services appropriately will address, simultaneously there will be categories of functions or facilities which we -- which I put into the basket called "business operations" as opposed to "military operations" -- which will be addressed in a cross-service way. Cross- service analytic teams will be stood up to look at cross-service assets.

Now, you want to know which categories fall into that basket. The Infrastructure Executive Council, on or before April 15th of next year, will recommend to the secretary what those categories are. Prior BRACs actually carved out certain categories -- initial pilot trainings, laboratories, health-care delivery military treatment facilities. I don't know precisely which categories, and how they will be carved out, will the IEC recommend to the secretary; I do know this: that there are some, in my mind, obvious ones.

And while it's not a functional category, if one were to look at the national capital region, made up of installations owned by four services, plus the Pentagon, the only military reservation not owned by a service, "owned," quote, by the secretary of Defense, you could imagine that if it's not done in a cross-service way, the rationalization and use -- appropriate use of our real estate in the national capital region will not be optimized.

We should look towards more joint use of bases. Twenty-five years ago -- 27 years ago, when Secretary Rumsfeld and I were in the Pentagon, most, if not all, installations were single-service, single- mission. Over the last 25 years, we have seen a movement toward multi-service, multi-mission installations, albeit it not a lot. The secretary put down the marker: maximize joint use. In the national capital region, it's obvious that an Army function or facility ought to be able to exist on an Air Force installation. We're not going to homogenize the installations of the NCR, but what we are going to do is rationalize where certain functions ought to best exist.

We have now huge -- excuse me -- very large military installations here in the Washington area. We also have an enormous amount of leased space in the Washington metropolitan area. And the question is, can we better utilize the military installations, the military real property assets owned by the services, and reduce the expense of leased space? I don't know yet, but I do know the only way to properly rationalize that is to do it in a cross-service way.

Q: If I can just follow up real quick, on the actual list of installations that you recommended for closure, will the services do that list, or would the analytical teams do that list?

DuBois: It is a combination. As I said, there will be analysis done within each service. Those service secretaries and service chiefs of that particular service will make their recommendations to the Infrastructure Executive Council.

There will also be analysis done on those categories agreed to in -- by the IEC in the cross-service arena, which will be managed by the so-called Infrastructure Steering Group, which are the vice chiefs -- it's chaired by Pete Aldridge -- the vice service chiefs, vice chiefs of services, and the assistant service secretaries for installations and environment, and myself. That -- those cross-service recommendations also go to the IEC, and ultimately the recommendations to the secretary of Defense.

It's a balanced approach. Neither is it all service-oriented, nor is it all, shall we say, OSD-oriented. It's a balanced approach.

But what we're trying to achieve here is a recognition that service-centric military operational decisions -- where tanker aircraft are positioned, where bombers are positioned, where carrier battle groups are stationed, where maneuver training areas for Army divisions -- where they should be -- is really a military decision centric to their respective services.

But areas of laboratories and research and development centers -- I've spoke about the national capital region, which is nonfunctional but clearly, because of the weight -- we have over 100,000 military and civilian employees of the Department of Defense within 50 miles of the White House, not to mention some of the crown jewels of our real estate. And we've got to use them -- use it intelligently.

Yes, sir?

Q: Along these lines, in the past year, 20 to 28 percent of military properties have been deemed excess. If you are now talking about joint service uses and combining some of these bases, would that number increase and how much?

DuBois: The excess capacity statistic, which the secretary and others, including myself, have referred to, is based on a 1998 Capacity Utilization Study. It is true that there is excess capacity in some range of 20 to 25 percent, but that is a clumsy number insofar as it's an aggregate number. If one says we will address all excess capacity and remove it from the inventory, that does not translate to 20 to 25 percent of all installations will close. What it does say is that given the force structure that we have today, and that we can project into the future, do we have more pier space than necessary, and if so, where is that excess capacity of pier space per ship? We may have overcapacity or undercapacity in certain areas, and that's why you have to have an analysis such as this. Do we have enough apron space, hangar space, and runway space for both training and operational deployment?

The 1998 study stated, when you came out at the other end of the analysis, some 20 to 25 percent excess capacity. If we move towards maximized joint use, both here and abroad, I don't know how that impacts the capacity calculation. I do know this; that military value and operational necessity is going to drive these decisions.

Remember that BRAC is not inexpensive. BRAC will probably end up costing the Department of Defense, over a four- to six-year period, depending upon how large the BRAC is, depending upon how much capacity you are reducing, and by definition, how much you're realigning, it could cost $10 billion to $20 billion over that period of time. But what do you get as a result? We believe that with that investment, by 2011, you will have a steady state savings-rate of in excess of $6.5 billion annually. That includes the projected environmental remediation necessary for properties returning to the civilian sector.

Now, a number of members of Congress have called into question savings rates, have called into question cost to complete of environmental remediation. I cannot deny that these are large numbers. But what I can say is the GAO; the Congressional Budget Office; and other outside groups, IDA, CNA, et cetera; have studied the past four BRACs, the cost of investing and achieving those results and the savings that have emanated from those results, and they have confirmed our estimates.

What will happen with the '05 BRAC will be directly related to the extent to which we realign and reconfigure the infrastructure that we have here and abroad.

The important thing to remember, too, is one of the biggest complaints, and it's a legitimate complaint, is when a decision is made to close an installation, it has taken too long to transfer that installation into an economically viable civilian site; that years pass between closure, the military moving off, until there's an economically viable replacement. And we are going to address the disposal issue up front; how to lessen the time between closure, removal of military missions, and the economic redevelopment of that property. It serves no useful purpose to have that time any longer than it needs to be, which means you've got to think ahead, which means that communities which are ultimately impacted would serve themselves well to determine how -- and work with us to how most quickly transition to private sector economic basis -- to a private sector economic basis.

Anyway, yes, sir?

Q: The process that you outlined for how the BRAC decisions would be made here, how the list would be formulated; as a practical matter, does that mean that they're going to be sort of more hands in the pot, so to speak? And could that not make it more difficult in some ways?

DuBois: One of the concerns from the very beginning, voiced to us by members of Congress who have lived through some of the prior BRACs -- and I will say this: Some of the people who voted against us -- they said, "We can only embrace your ultimate decisions, your ultimate recommendations, if military value is indeed the primary selection criterion."

In order to ensure that military judgment was integrated to -- into this process from the very beginning, we believe that there was only one way to do it, and that was to have all the Joint Chiefs, including the chairman and the vice chairman of the Joint Chiefs of Staff, and the vice chiefs of the services, with their civilian counterparts, involved.

Now a management consultant, which I was once, would look at this structure and say it's awfully cumbersome. On the one hand and the other hand, we must ensure that the product given by a process incorporates the best military judgment in this department. There's only one way to do that. There will be a lot of people around the table.

These decisions, these trade-offs -- can you imagine the chief of staff of the Air Force, the chief of staff of the Army, the CNO and the commandant of the Marine Corps addressing some tough decisions about joint use of bases? Should a Marine Corps aviation set of assets exist on an Air Force base? You can quickly go to who's in charge, who's in command of the base. This is, at the very least, modifying some cultural aspects of our services that have been ingrained for many, many years. But it is the time to address it.

So in answer to your question, there are a lot of cooks in the kitchen, but I didn't know any other way to do it, by virtue of what the secretary of Defense is trying to achieve, which is the essential -- essentially, the same amount of infrastructure reduction in four prior BRACs he wants to do in one.

I sometimes feel like Sisyphus. You know, I roll the stone up to the top, and then it comes back down again. (Chuckles.) This is going to be very challenging and yes, very exciting.

Each of the assistant service secretaries for installations and environment -- with whom I meet as a corporate body once a week, and I meet with them individually at least once a week -- has identified a deputy assistant service secretary for BRAC. I don't know if they've been all announced yet. They are some really sharp, capable folks, who, working with my principal deputy, Phil Grone, constitute a brain trust that is quite impressive in terms of their experience. As you know, my principal deputy, Phil Grone, was for many years the deputy staff director of the House Armed Services Committee and specifically the principal -- the staff director of the Military Installations and Facilities Subcommittee. He knows this stuff cold. He has lived through it.

And I think it'll be important, perhaps in April, to come back to you, probably with the assistant service secretaries, and maybe the vice chiefs, and kind of give you a progress report.

The more people you put at the table, the longer it takes; arguably, the more contentious sometimes the discussion, but in my humble estimation, the better the product.

Yes, ma'am?

Q: Do you have a time line? I know you said that you expect to submit this by spring of '05. But what happens between now and then?

DuBois: The secretary, as you know, wrote a kick-off -- so- called kick-off memo on November 15th, outlining the basic structure, decision structure and methodology that - which will form the BRAC process.

Each service secretary, in turn, has published their own memos to dictate to their own services how the individual services will do it. By April 15th, the IEC, upon recommendation from the Infrastructure Steering Group, on which I sit, will decide -- will recommend to the secretary what categories from the beginning should be looked at cross-service and what categories should remain service-centric.

The law says that if you don't -- do not meet the following deadlines, BRAC stops. BRAC stops. One, December '03, the secretary must publish the selection criteria. Notwithstanding that the president of the United States must nominate and the Senate must confirm members to the BRAC commission in early '05, by May -- no later than May 16, 2005, the secretary must make his BRAC recommendations to that commission and to the defense committees on the Hill. If he does not meet that date, BRAC stops.

In September 8th, no later than September 8th, the commission must report to the president of the United States. If they do not meet that date, BRAC stops. The president then must approve or disapprove, in whole but not in part, the commission's recommendations and transmit his decision to the Congress by 23 September. Now, if they are approved, those recommendations are binding, are binding 45 days after the president transmits them to Congress, unless Congress enacts a joint resolution of disapproval.

The interesting wiggle here is that if the president doesn't like what the commission has sent to him, he can send them back to the commission. But then the commission is given less than one month -- 20 October -- to come back to the president with either the same or some modified list of recommendations. The president then, again, accepts or not, in whole, but not in part. If he accepts and it goes -- then goes -- finally then goes to Congress, he has until November 7th, a couple of weeks later, his deadline for approving those revised recommendations and transmitting them to Congress. Which means if it went through that entire process, you might not know until December of 2005. I anticipate, however, that you will know -- that we will know, the world will know, sometime in the end of October of 2005.

The Congress crafted this approach rather skillfully, I think, because it allows them to look at the totality of the recommendations against the force structure of the department, and it protects them individually and corporately from, shall we say, nitpicking the recommendations. They really do have to look at it -- and I think they recognized this because they were the ones who put this construct together -- they look at it now in terms of national security, and not in terms of individual district or state issues.

I will also say that a serious requirement here, that in February of '04 -- and this is why people say, "Why are you starting now? You don't have to make these recommendations until '05" -- important fact, besides the selection criteria the secretary has to put out in December of '03, in February of '04, the secretary has, under the law, some very specific reports that he must deliver to Congress. He must deliver a 24-year force structure plan; he must deliver a world-wide infrastructure inventory; and type of infrastructure necessary to support that force structure plan. He's got to also deliver an economic analysis of the effect on the Department of Defense, with respect to potential closures and realignments in the reduction of excess infrastructure. And this is very important: He must certify that there is a need for BRAC and that there will be annual savings, annual net savings -- annual net savings -- by 2011. Remember, there are savings quickly on in this process, but there are costs in the early part of this process; when you have to build new to realign force structure and missions from one base to another.

But as that new military footprint construction falls off in year three, the savings that you have built up, and continue to build up, get higher and higher -- there's a cross-over point. The cross- over point, the secretary must certify the cross-over point will be no later than 2011.

Now, some of this occurred and appeared in the prior BRAC legislation, some of it didn't. Has a greater burden of proof been placed upon the secretary? Yes. Is he worried about it? No. Will this require a lot of tough decisions and hard bargaining? Yes. Will you be very interested in what's going on over the next two years? Certainly. Will there be an upmost of discretion emanating from these efforts? I hope so.

Q: First question. Who is on the commission -- who is on the BRAC commission?

DuBois: The present? -- I mean, the BRAC commission doesn't come into existence until February -- January, February of '05.

Q: But specifically who would select the members for that?

DuBois: Ah. The law this year calls for nine members. The president -- let me see if I get this straight -- the speaker of the House -- sort of like the 9/11 commission -- the speaker of the House gets two, the minority leader of the House gets one, recommends to the president because he in turn nominates to the Senate. The majority leader of the Senate gets two, the minority leader of the Senate gets one. That's six. Three are within the purview of the president, for nine. The president appoints the chairman. Those nine nominees will go to the Senate; the Senate will confirm.

Q: Which installations are most vulnerable to closing at this point? Do you know?

DuBois: All installations are going to be judged equally. All installations will be required to provide data, the so-called data call. There is no way to approach this -- you know, as the secretary said, you wake up in the morning, and you don't say, "Let's do a BRAC this year." You must approach this in a comprehensive and objective fashion. All installations are on the table.

Q: Do you have an estimate of how much it will cost to do the environmental cleanup of a large BRAC round?

DuBois: Remember that the environmental remediation bill is driven by what you're going to use the land for. If you have a former -- as was the case in prior BRACs -- shipyard, does it make sense to the American taxpayer to remediate that shipyard to build a child day- care center on? I would submit that doesn't make very much sense because the cost would be enormous, presuming you could even do it, on the one hand. On the other hand, cost to complete the four prior BRACs is now, in terms of environmental remediation on the basis of the proposed use of the land, is 3-plus billion dollars, I think, is the current cost-to-complete number.

Why does this number -- and this is what I found very interesting when I got into this job, now 18, 20 months ago. I looked at the cost-to-complete projection year by year. And because we spend several hundred million dollars every year to remediate BRAC properties environmentally, you would have thought that you would have seen a nice stepped function where it goes down every year by the same amount of money that was appropriated to deal with it every year. Not true, because land use decisions change year to year.

When the local redevelopment authority decides that they want to use land for parks that has unexploded ordnance on it, that was a former gunnery range, and if that is the agreed-upon use of the land -- remember what it said, agreed-upon use of the land, the recorded decision negotiated between the local redevelopment authority and the Department of the Army -- if one were to say, "Let's create a playground on a former gunnery range," first of all we would say that's an awfully expensive use of that piece of property; you really ought to use the property over here on this installation for the playground; maybe what we ought to do is to fence off the gunnery range and create, by definition, critical habitat for endangered species but not have human beings wander around on it or build a condominium on it -- point being, land use drives cost, and smart land use -- open space, critical habitat, environmental management areas, vice industrial parks -- should -- and a shipyard -- be used as a shipyard? Imagine, if you will, the hypothetical that we closed -- and we did, in the four prior BRACs -- a shipyard, and it is now used as a shipyard. The environmental cleanup is minimal. See the point I'm making?

Q: So DOD will have a say into what the reuse of the land will be?

DuBois: DOD has a say now, insofar as we negotiate with local land -- local redevelopment authorities. Remember, their incentive is not to stretch this thing out; their incentive is to transist that prior military-owned and operated property into something that's economically viable for the community. For them to suggest that -- for a local redevelopment authority to suggest that their desire to use the land for Purpose A requires an enormous environmental cleanup bill, which Congress is not necessarily in the mood to appropriate, only extends the time to some form of environmental -- economic redevelopment.

So local redevelopment authorities are smart enough to recognize that their objective is to use the land smartly and try to use it in ways that it was used prior so that it doesn't require an enormous amount of time and money for environmental remediation. Let me make one point very clear, however. Whether it's BRAC properties, formerly used defense sites, or current operational installations and training and test ranges, if at any time, if at any time there is determined to be an environmental situation that will impact human health and safety, the department will redress it immediately, even if it means reprogramming dollars from one account to another.

Example, Spring Valley(Washington, DC), where I grew up as a kid. They had no idea what was there. Now that we do, the Army has reprogrammed $50 million or $60 million in just the last year alone to address the situation, which was, as Secretary Rumsfeld likes to say, an unknown unknown. But when it became known, we addressed it.

Yes, sir?

Q: Land use is not the only thing driving costs here. Specifically for '04, many people I'm in contact with are worried about an impact upon environmental spending from the war on terrorism.

DuBois: I want to probe that a little bit, and let me answer it this way, and you tell me whether I'm getting close to what you need. The FY '03 request to the president for our environmental programs in the Department of Defense was in excess of the FY '02. It was over $4.1 billion. The FY '04 environmental program request will be no less.

Q: Than '03?

DuBois: Than '03. The focus on environmental programs, which encompasses everything from environmental cleanup, pollution prevention and control, conservation programs, research and development, which, you know, here we're talking $4.1 billion -- that's a lot of money -- but out of that, it may not sound very much, but when you start spending $60 million, $70 million, $80 million on research and development alone to how to identify, characterize and remove unexploded ordnance on formerly used Defense sites, we hope that that will yield a less expensive way to deal with these situations, therefore, driving down the costs, ultimately, over the next decade.

I like to refer to that. People forget that the Defense Department is one, if not the biggest, investor in these kinds of R&D efforts in the world. We have a good reason to do so because, yes, we hope that some of these new technologies under development will help us reduce the environmental situations in various -- on various installations, formerly used installations, at a faster and less expensive cost. So we have an incentive to do that.

Q: But, SERDP an ESTCP, the two research arms at DOD, were both cut this year.

DuBois: The '03 versus '02?

Q: Yes.

DuBois: Remember that the Strategic Environmental Research and Development Program (SERDP) and the Environmental Security Technology Certification Program (ESTCP) are OSD accounts. There's also research and development being driven and funded by the individual services, military departments. I'll take it for the record to determine exactly what the year to year investments have been in toto, not just SERDP or ESTCP, because I think we have to look at the total picture. But you raise an important issue, and I'll look into that.

Yes, sir?

Q: If I can go back to when you mentioned before about military construction, as it relates to the '04 budget; and as in the past couple of years, we've seen a little bit of a tug of war between the Hill and the Pentagon over MILCON, would you expect to come back again this year and try to sort of put the brakes on, even though that may well be a futile effort?

DuBois: I think that's -- "putting the brakes on" certainly wouldn't be a term that we would use. As I indicated, there is a delicate balancing act every year, between what one spends in the MILCON -- remember, there are five major accounts, and that doesn't mean -- certainly, I had to explain this to my wife the other night, and it helped me understand, too, and some of my friends -- the five major accounts are always in competition, whether it's research and development, procurement, personnel, MILCON, acquisition.

We believe that this year, we will ask for MILCON that will sustain the facilities at the appropriate level -- I think our corporate sustainment rate is 93 percent, that we're trying to achieve; that we'll take into consideration new footprint construction for mission-critical requirements in fighting the global war on terrorism; and we'll also recapitalize -- with our goal being a 67- year recapitalization rate, we're not achieving it yet, within the 2010 time frame.

How -- and this is the big question mark and one which no one is equipped to answer and then translate into a calculation -- is how much of our excess infrastructure, how much of our real property assets will, in point of fact, be reduced through the BRAC process?

There will always be stranded investments. There have been in the past, and there will be in this BRAC. Why? Because I cannot predict what the services and ultimately the secretary of Defense will agree upon in terms of base closure and realignment.

What we have to do now, however, is to sustain and recapitalize infrastructure where it's most necessary and where it's directly related to mission-critical requirements.

There will be, inevitably, by virtue of that approach, stranded investments somewhere. But I think you can understand we can't -- I can't say, "Okay, 20, 25 percent -- then we'll just cut the MILCON spending by 20, 25 percent." That's not responsible.

I'm going to go here in a few minutes, if there's anything else. But I look forward to talking to you again, and thank you very much.

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